Vanguard International High Dividend Yield strikes a balance between stocks with high dividend yields and managing the associated risk. This results in a tilt toward larger, more stable firms that should offer some downside protection.

This fund tracks the FTSE All-World ex U.S. High Dividend Yield Index. It starts with large- and mid-cap stocks in the FTSE All-World ex U.S. Index, excluding REITs, and ranks them by their expected dividend yield over the next 12 months. The index selects those representing the higher-yielding half of eligible dividend-paying stocks. Focusing on dividend yield gives the portfolio a value orientation and can be a source of risk. High yields can stem from stocks with poor prospects and declining prices. Some of these firms may also pay out a high percentage of their earnings as dividends, reducing the portion that can be reinvested to grow their businesses.

Value traps, or stocks with deteriorating fundamentals and declining prices, pose a significant risk to dividend funds. But this strategy effectively bridles its exposure to risky companies. Sweeping half of the dividend-paying universe into its portfolio diversifies stock-specific risks, which limits the influence of distressed firms. Weighting constituents by their market cap also emphasizes larger, more stable firms that should have the capacity to continue making dividend payments. Market-cap-weighting further reduces the impact of value traps by reducing their weight as their prices fall.

Leaning toward large, profitable firms has aided the fund's performance. It has beat its Morningstar Category Index, the MSCI ACWI ex USA Value, by 84 basis points annualized from its launch in February 2016 through July 2023, while its volatility was slightly lower. The fund's low fee of 0.22% is among the cheapest in its category and should provide a durable long-term advantage.

Clarification (Sept. 7, 2023): While annual fees are cheap, buyers of this strategy's mutual fund share classes are subject to a 0.25% purchase fee intended to minimize the impact of transaction costs on the fund. This benefits current fundholders at the expense of new investors. The exchange-traded fund version of this strategy is not subject to the purchase fee.

Analyst Rating

An effective global approach to higher yield.

Director

Bryan Armour

Shell PLC

Novan

Rogers

TotalEnergies SE

BHP Billiton

Royal Bank of Canada

ClearBridge American Energy MLP Fund, Inc.

Toronto-Dominion Bank

Banco Santander

Autoliv

This fund's simple, repeatable approach effectively balances risk and reward. It provides exposure to dividend companies while limiting most of the negative side effects, warranting a Process rating of Above Average.

Above Average

Process

This well-supported team earns an Above Average People rating. The portfolio managers utilize Vanguard's global infrastructure and portfolio management technology as members of Vanguard’s equity index group.

The fund is comanaged by Michael Perre and Aaron Choi. Perre is a principal in the Vanguard equity index group. He has been with Vanguard since 1990 and has worked in various roles at Vanguard. Choi took over responsibility for this fund from Justin Hales in December 2021. Choi has served in an investment management role within Vanguard's equity index group since 2015 and has been with the firm since 2011.

Manager changes like this aren't unusual at Vanguard. Managers typically rotate to different funds every few years to improve their breadth and depth of expertise. These managers not only oversee each portfolio but also execute trades on a day-to-day basis. They also have access to Vanguard's global trading desks, enabling them to make the most cost-efficient transactions in various global markets.

Vanguard’s compensation structure aligns managers’ interests with investors’. The managers are compensated with a bonus that factors into the fund's ability to meet its objectives. This includes the managers’ record of tracking their benchmark index over the prior 12 months.

People

The Vanguard Group retains a High Parent rating. 

Mutual ownership, low costs, and a direct-to-investor playbook have helped spur Vanguard's leadership within the United States. Client service missteps notwithstanding, Vanguard over the past decade has grown its market share of U.S. open-end and exchange-traded fund assets at about a 5% annualized clip. At that rate, Vanguard's portion of the U.S. industry will cross 50% around 2035.

True, some competitors can now match or even undercut Vanguard on fees for broad market exposure. But Vanguard's burgeoning advice business could help it keep or even extend that lead. Through Digital Advisor and Personal Advisor Services, Vanguard has built an increasingly compelling ecosystem of advice for investors with simple to complex needs.

Vanguard is also using its advice business to expand overseas, but that's a work in progress. Of Vanguard's USD 7.6 trillion in global assets under management in March 2023, non-U.S. investors owned less than 10%, a figure that has changed little in recent years. Strategic shifts in China and other markets account for the slow pace, including returning money to institutions that had been layering on fees. Vanguard hopes to recoup that money and more by focusing on individual investors and the advisors who serve them. Provided Vanguard sticks to its playbook, its advantages should translate into success abroad, too.

High

Parent

Vanguard International High Dividend Yield ETF

VYMI tracks a market-cap-weighted index of developed and emerging market firms (ex-US) that are expected to pay above average dividends over the next 12 months.

The fund tracks a market cap-weighted index of developed and emerging market firms (ex-US) that are expected to pay above average dividends over the next 12 months.

Vanguard International Dividend Appreciation ETF

Vanguard S&P 500 ETF

Vanguard Value ETF

Dividend investing is often looked down upon by factor investors, but research shows that dividends play a crucial role in long-term investment returns. Factors like market, size, and value have been identified as key drivers of investment returns, but implementing factor strategies can be costly and may not outperform simple index funds. Global evidence supports the importance of dividends, with studies showing that dividend stocks outperform non-dividend paying stocks and contribute significantly to total returns.

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Global X SuperDividend US ETF

SPDR S&P Emerging Markets Dividend ETF

First Trust Morningstar Dividend Leaders Index Fund

FlexShares International Quality Dividend Defensive Index ETF

SPDR Portfolio S&P 500 High Dividend ETF

While the stock market has recorded an incredible rally in 2023, topping all expectations, its journey in the second half has been rough.

6 Cheap High-Dividend ETFs to Buy Now

VYMI has underperformed its close peer VYM since inception. US stocks in general have grown earnings faster than international peers, even if they have also enjoyed some multiple expansion. VYMI's stock selection methodology is sound. Weighting higher dividend yield stocks by market-cap results in more of a blue chip fund than the high yield fund its name suggests. VYMI's basket of stocks trades at a suitably low valuation. It has a good shot of narrowing its underperformance versus VYM.

VYMI: International Blue Chip Exposure At A Fair Price

WisdomTree Emerging Markets High Dividend Fund

Pacer Global Cash Cows Dividend ETF

With so much uncertainty remaining around the Fed's rate cycle and the potential for recession, many investors are beginning to look toward international equity markets for the means to build income. Yields continue to look attractive for international dividend ETFs, in particular.

4 ETFs For Investors Looking For International Dividends

VYMI is one of the largest, most well-known international dividend ETFs in the market. The fund has seen strong, although not outstanding, performance since 2022. A look at the fund, and some of its recent developments, follows.

VYMI: High-Yield International Equity ETF, 4.6% Yield, Cheap Valuation

iShares Core High Dividend ETF

Invesco High Yield Equity Dividend Achievers ETF

Are you looking for a reasonable amount of income without a ton of risk? If so, high-yield ETFs to buy are a better way to go than individual dividend-paying stocks because they give you diversification, which significantly reduces company risk in the process.

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Global X MLP & Energy Infrastructure ETF

Schwab US Dividend Equity ETF

The author argues that the combination of Schwab US Dividend Equity ETF, iShares Core High Dividend ETF, Vanguard International High Dividend Yield ETF, and Global X MLP & Energy Infrastructure ETF provides a solid foundation for a dividend portfolio. These ETFs offer diversification across sectors, geographies, yields, growth rates, and types of companies, while mostly avoiding yield traps and high-risk companies. The goal of this strategy is to maximize dividend income and growth, rather than outperforming the S&P 500 in total returns.

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JPMorgan Equity Premium Income ETF

Invesco S&P 500 High Dividend Low Volatility ETF

Vanguard High Dividend Yield ETF

Vanguard offers two high-yield dividend ETFs -- one for American companies and one for international. The SPDR S&P 500 High Dividend ETF is equal-weighted and has a very low expense ratio.

These 5 Dividend ETFs Are a Retiree's Best Friend

Earlier this year, I wrote a thorough review of the best Vanguard funds to buy in 2023. In this article, I want to zoom in on Vanguard's two foreign dividend ETFs, which are an attractive low-cost way to instantly diversify your income internationally. These Vanguard ETFs are the two largest focused on non-US dividend stocks: one tilting towards high dividend yields, while the other seeks more dividend growth.

VIGI Vs. VYMI: Which Dividend ETF Is The Better Buy?

iShares Select Dividend ETF

Real Estate Select Sector SPDR Fund

Vanguard Dividend Appreciation ETF

Invesco Variable Rate Preferred ETF

When looking for the best dividend ETFs for retirement, stability often outweighs thrill. Investing in growth stocks can be exciting, but for retirees, the allure lies in investments offering predictable performance and regular profits over the long term.

Top 7 Dividend ETFs for Retirement Income

US stock markets have been outperforming for years, but no longer the past months. Both international diversification and high dividend investing are a good idea and VYMI gives exposure to both.

VYM: Why It's A Good Idea To Switch To VYMI

Avantis U.S. Small Cap Value ETF

Invesco Senior Loan ETF

Global X Russell 2000 Covered Call ETF

Schwab Strategic Trust-Schwab International Dividend Equity ETF

 SPDR Blackstone Senior Loan ETF

Vanguard Small Cap Value ETF

Vanguard Total International Stock ETF

Most Undervalued Asset Classes, Equity Industries, Segments, And Regions.

Most Undervalued Asset Classes, Equity Industries, Segments, And Regions

VYMI: Not Much Else Beyond High Yield

The Federal Reserve announced on March 22 that it was raising its key interest rate by 25 basis points, the ninth consecutive increase. As interest rates increase, dividend ETFs and those investing in them are caught in a perplexing situation.

3 Dividend ETFs With High Income and Low Fees

WisdomTree Global High Dividend Fund

WisdomTree U.S. High Dividend Fund

WisdomTree International High Dividend Fund

AAM S&P Emerging Markets High Dividend Value ETF 

Fidelity High Dividend ETF

Xtrackers MSCI All World ex US High Dividend Yield Equity ETF

Xt EAFE Div Yld Shs

Voya Asia Pacific High Dividend Equity Income Fund

Invesco S&P Intl Developed High Dividend Low Volatility ETF

Voya Emerging Markets High Income Dividend Equity Fund

Invesco KBW High Dividend Yield Financial ETF

Legg Mason Low Volatility High Dividend ETF

Legg Mason International Low Volatility High Dividend ETF

ETRACS 2xMonthly Pay Leveraged US Small Cap High Dividend ETN

AAM S&P 500 High Dividend Value ETF

Timothy Plan High Dividend Stock ETF

WBI Power Factor High Dividend ETF

Invesco S&P SmallCap High Dividend Low Volatility ETF

Stocks paying higher dividends showed their mettle during a challenging 2022: the S&P 500 High Dividend Index declined only a modest –1.1% even as the S&P 500 tumbled –18.1%. In our view, much of the volatility in high-dividend strategies, broadly speaking, comes down to portfolio design choices, which can create very different characteristics.

Taming Biases In High-Dividend Equity Strategies

Bayerische Motoren Werke AG

British American Tobacco

iShares MSCI Switzerland ETF

Fortescue Metals Group Limited

Mercedes-Benz Group AG

Nippon Yusen KK

Novartis

Oversea-Chinese Banking Corp Ltd

Roche Holding AG

Shinhan Financial Group

Unilever

With the dollar still strong and inflation fears still looming, now is an especially good time for US investors to buy more foreign dividend stocks. US investors should also consider tax advantages of splitting international dividend stock exposure between taxable and tax-sheltered accounts based on source country.

12 Top Dividend Stocks To Buy In The Current Market Environment

ProShares S&P MidCap 400 Dividend Aristocrats ETF

Unless you've got a lot of free time, opting to invest with dividend ETFs instead of selecting individual stocks makes complete sense. BusinessInsider.com recently profiled a former Swiss Banker who quit his job 10 years ago to live off dividends.

The Top 3 Dividend ETFs for a Diversified Portfolio

In summary, everything is offered that US investors, in particular, should want from a dividend ETF. The fee is low, the diversification worldwide, and with over 1,000 companies broadly diversified. In addition, the valuation is cheap.

VYMI: Is A Good Choice With High Dividend Yield And Cheap Valuation

VYMI yields a hefty 5.13% dividend. The index is broadly diversified with 1,300 plus holdings.

VYMI Provides Excellent Dividend Yield And Growth

VYMI is a widely diversified international high dividend stock ETF. The ETF includes exposure to both developed markets (~75%) and emerging markets (~25%).

VYMI: Great Addition To A Dividend Portfolio For International Exposure

Amplify Lithium & Battery Technology ETF

Xtrackers USD High Yield Corporate Bond ETF

Invesco S&P International Developed Low Volatility ETF

Global X Lithium & Battery Tech ETF

T Rowe Price Dividend Growth ETF

iShares Edge MSCI Min Vol USA ETF

Consumer Staples Select Sector SPDR Fund

On a weekly basis, VettaFi has sought to respond to advisor needs in a novel way. We asked questions about their views on the markets, what areas were of greatest interest, and what concerns they had.

Top 5 Insights Advisors Gave VettaFi in 2022

Vanguard Total Bond Market ETF

iShares iBoxx High Yield Corporate Bond ETF

iShares National Muni Bond ETF

These yield-producing stock and bond funds are all down less than the S&P 500 this year.

6 ETFs That Are All You Need for Retirement

iShares MSCI EAFE Small-Cap ETF

Vanguard FTSE Developed Markets ETF

One consequence of the Federal Reserve's inflation fight is that the US dollar is currently quite strong. This means that it's cheaper to travel abroad. However, this also means that you can invest your money abroad and get more bang for your buck.

Go With The Flow: Take Advantage Of The Strong Dollar With These 3 International ETFs

While defensive strategies like Treasury inflation-protected securities (TIPS) are available to investors, another way to beat rate hikes is to simply outpace them with more yield.

Outrun the Fed's Rate Hikes With These 2 ETFs

International stocks offer investors cheap valuations, above-average yields, and the potential for market-beating returns. VYMI is a diversified international equity index ETF, focusing on stocks with above-average yields.

News for Vanguard International High Dividend Yield ETF ETF (VYMI)